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The end of card payment charges

Written By Chloe Gray | 12 January 2018

You're now free to use your credit and debit card without any extra costs. Here's what you need to know...

In today's cashless society, there is nothing more irritating than popping to the corner shop only to be told that you'll pay almost double the price of a cheap snack if you use your card.

Even worse is how the price of booking a holiday online surges when you opt to pay by credit card.

Great news then, as extra charges for using credit or debit cards will be banned from 13 January.

Under the current rules, businesses can only charge you what it costs them to process a card payment and can not make a profit out of it. But many companies still charge far more: according to campaign site Fairer Finance, FlyBe still employs a 3% charge on card payments, and Swinton Insurance a 2.5% charge.

How will it work?
This is a total ban - meaning no UK business will be able to implement any charge on credit or debit card transactions by a UK consumer.

But there are questions about how this policy will be policed: trading standards will most likely be in charge of enforcing the ban, but the Chartered Trading Standards Institute says: 'Given we've lost 56% of Trading Standards Officers since 2011, any additional area for enforcement is going to be a challenge.'

You should always question a company who you think have a surcharge on their payments, and report them to Trading Standards.

The other worry is that businesses will simply put up their prices to cover losing out on these surcharges. While this is likely, Hannah Maundrell, Editor in Chief of money.co.uk, says that it's still a better option: 'I’d expect some companies may increase prices to compensate for the loss of the surcharge, however this should be reflected in the upfront price of the goods to make it easier for us to make a direct comparison. Being stung at the end of a transaction with a service charge isn’t fair – businesses ought to be transparent about their pricing upfront.'

Companies can also still refuse to accept card payments - but it is unlikely. But some smaller businesses might decide to only allow card payments on purchases over a certain amount, usually £5 or £10.

What about other charges?
Extra fees that have nothing to do with debit or credit cards can still be charged, for example booking fees, service charge or additional costs like choosing your seat when booking flights. However, no business can rename a card surcharge as a service charge or anything else.
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